tl;dr
Investor bets against cryptocurrency-related stocks have surged this year, with bitcoin (BTC-USD) miners such as MicroStrategy (NASDAQ:MSTR) at significant risk of a short squeeze, according to financial data provider S3 Partners LLC. Short interest in the crypto sector hit around $10.7 billion...
Investor bets against cryptocurrency-related stocks have surged this year, with bitcoin (BTC-USD) miners such as MicroStrategy (NASDAQ:MSTR) at significant risk of a short squeeze, according to financial data provider S3 Partners LLC.
Short interest in the crypto sector hit around $10.7 billion in 2024, marking a $3.7 billion rise year-to-date, as highlighted by S3 Partners in a report released this week.
The increase consists of approximately $4.0 billion in mark-to-market gains in the share prices of the shorted crypto stocks, led by MicroStrategy (MSTR), Coinbase Global (NASDAQ:COIN), and Cleanspark (NASDAQ:CLSK). Meanwhile, there was a $302 million increase in short covering, notably in COIN, which offset the impact.
“Crypto stock short sellers have been selling into a rallying market—either looking for a pullback in the Bitcoin rally or using the short positions as a hedge versus actual Bitcoin holdings,” said Ihor Dusaniwsky, Managing Director at S3 Partners.
Bitcoin (BTC-USD), the highest-profile cryptocurrency, has surged over 58% this year, joining a rally alongside other major digital tokens such as ether (ETH-USD), cardano (ADA-USD), solana (SOL-USD), and dogecoin (DOGE-USD).
Crypto-linked stocks, including bitcoin miners MicroStrategy (MSTR), Coinbase Global (COIN), and Cleanspark (CLSK), have also recorded substantial gains.
“These crypto-related stocks are extremely crowded and very squeezable relative to the U.S. market,” noted S3 Partners. Its proprietary metrics for these stocks, the Crowded score and Squeeze score, stand at 57.34 and 78.69 compared to the Street average of 32.41 and 34.41, respectively.
“For the trades that are risk positions, there is a strong squeeze possibility in the more unprofitable shorts in the sector like MSTR, COIN, and CLSK,” added Dusaniwsky.
More about MicroStrategy Incorporated
MicroStrategy Incorporated provides global business analysis software and services. The company is headquartered in Tysons Corner, Virginia. It operates within the technology and services-prepackaged software industry.
As of the latest data, the market capitalization of MicroStrategy Incorporated stands at $28.92 billion, with a stock price of $64.52. The company has shown a 52-week high of $1144.25 and a low of $26.42. The current price reflects a decrease of 0.775 points or 0.061% from the previous close.
MicroStrategy's stock performance is worth monitoring within the context of its historical price range, industry trends, and broader market indicators. Given the company's presence in the global business analysis sector, its stock movements may be influenced by technological advancements, demand for analytical software, and shifts in the services industry.
More about Coinbase Global Inc
As a Technical Analyst with a deep understanding of market trends and indicators, I recently conducted an in-depth analysis of Coinbase Global Inc. (COIN), a company providing financial infrastructure and technology for the crypto economy. With its headquarters in Wilmington, Delaware, COIN operates within the finance and finance services sector.
Upon examining the data, I found that COIN currently has a market capitalization of $64.23 billion, with a stock price of $736.44. The company reported no dividend yield, a price/earnings ratio of 0.36, and a beta of 12.41. Additionally, COIN has a return on equity (ROE) of 3.24%, a debt-to-equity ratio of 0.494, and a trading volume of 2,926,556,000.
Based on these figures, it's essential to consider the implications of COIN's financial metrics, particularly in the context of the crypto market's inherent volatility and the company's position within it. This analysis is crucial for investors seeking to understand the potential risks and opportunities associated with COIN's stock.
More about CleanSpark Inc
In the realm of energy software and control technology solutions, CleanSpark, Inc. stands as a global player, with its headquarters situated in Woods Cross, Utah. Despite the ubiquitous nature of its operations, the company's stock performance has seen fluctuations in recent times. The stock, under the ticker symbol 4200958000, has exhibited a downward trend, with a decrease of -0.69 points, settling at 1.639. This downward movement indicates a potential resistance level at 1.652, with the stock trading at a value of -0.381. The trading volume stood at 214,375,000 shares, with a relative strength index (RSI) of 21, suggesting a possible oversold condition. The technical analysis of CleanSpark, Inc. reflects a bearish trend, backed by the RSI indicator signaling an oversold market. This could potentially indicate a reversal in the stock's downward movement. However, it's essential to approach such conclusions with caution, recognizing the inherent uncertainty of market predictions and the possibility of unforeseen external factors impacting the stock's performance. While CleanSpark, Inc.'s presence in the energy software sector remains significant, investors should exercise prudence and consider the broader market conditions before making any investment decisions based on this technical analysis. It's crucial to acknowledge that past stock behavior does not guarantee future performance, and as such, any investment actions should be approached with a comprehensive understanding of the associated risks.
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